When Jim Cramer saw the volatile action of Disney's stock on Wednesday, he knew that in order to determine what happened, he had to be clinical and unemotional. After all, he doesn't consider this just any ordinary stock. It's the one that he has always told investors to buy for their kids and then put away.
"You have to ask yourself, has that much changed with one quarterly report? To figure that out, you have to analyze not just Disney's fundamentals, but the stock itself," the "Mad Money" host said.
When he looked at the stock, Cramer found that it all came down to just three words used by Disney's CEO Bob Iger.
Disney has been the best performer of the Dow this year. Its historic run began in February 2014, at about $71 a share. It closed at $121 Tuesday night.
Cramer argued that Disney's stock was priced for perfection coming into the quarter, trading at 25 times earnings. When a stock is that expensive, the company cannot afford to miss estimates, and Disney did.
"So, I'm not dismissing this decline, but most stocks do get cheaper when they go lower, and that certainly goes for Disney's," Cramer said. (Tweet This)